Is nuclear energy more expensive than offshore wind? | 121 comments (121 topical, 0 editorial, 0 hidden)

Re: French Senate report (none / 1)

The North Sea continental shelf is really special. Where else on the planet is there a comparable geological base for offshore wind?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 11:01:45 AM EST
[ Parent ]

Re: French Senate report (none / 1)

Maybe Indonesia?

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Jul 20th, 2012 at 11:56:43 AM EST
[ Parent ]

Re: French Senate report (none / 1)

Some candidates:

North Sea
Caspian Sea
Indonesia/New Guinea/Norhtern Australia
New Zealand
East China Sea
Orhotsk Sea
Bering Straits
Falklands
Hudson Bay

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 12:41:57 PM EST
[ Parent ]

Re: French Senate report (4.00 / 3)

Lake Erie.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Jul 20th, 2012 at 05:40:35 PM EST
[ Parent ]

Re: French Senate report (none / 1)

Thats why there is sabre rattling about the Falklands!

(No, not really.)

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sun Jul 22nd, 2012 at 08:04:10 AM EST
[ Parent ]

An additional criterion (4.00 / 2)

beyond geology is to be near a significant (and credit worthy) load center...

That seems to take most of your list off - leaving possibly New Zealand and (some of) the Great Lakes. The North East of the Us is probably the only other area which makes sense: otherwise Japan will make a lot of sense for floating technology, once it's made to work at a decent cost.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Jul 22nd, 2012 at 05:17:18 PM EST
[ Parent ]

Re: An additional criterion (none / 0)

New zeeland doesnt really have much use for... any. power sources other than conventional hydro, tough. It is essentially "Norway, southern hemisphere edition" as far as hydro resource goes.

by Thomas on Mon Jul 23rd, 2012 at 02:53:53 PM EST
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Re: An additional criterion (none / 0)

Except local opposition stopped a number of projects, which were more akin to Island's; as is the presence of geothermal. Wind does have a chance, especially as New Zealand has some of the world's best on-shore sites (capacity factors like for North Sea off-shore wind farms or higher).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Jul 23rd, 2012 at 03:15:57 PM EST
[ Parent ]

Re: An additional criterion (none / 1)

Seems like Shanghai would be a significant and credit worth load center if the manufacturer of the wind turbines paid their workers in ¥RMB.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 03:23:43 PM EST
[ Parent ]

Or US$ (n/t) (none / 0)

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 03:30:28 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

So long as the Chinese have an economic need to discount the Yuan Renminbi against the dollar, not quite as strong a load center in US dollars, but if they decide to shift the weight of their basket-peg away from the US$, then certainly, those paying workers in US$ as well.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 03:37:25 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

It seems to me that printing RMB to buy dollars to pay for a wind farm would depress the RMB against the US$ just as effectively as printing it to buy Uncle Sam's IOUs and stockpile them at the central bank. This not so? And if it is not so, then why aren't more African countries printing local currency and buying out Uncle Sam with it?

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 03:42:13 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

The way that a nation avoids becoming exposed to an exchange rate meltdown a la many Southeast Asian nations in the Asian Financial Crisis is avoiding excessive debt denominated in foreign currency.

Which is why the parenthesised part of "a significant (and credit worthy) load center" brings the country of manufacture into play: in what currency is the credit being created? If its being created in Yuan Renminbi, then Shanghai is both a substantial and a quite credit worthy load.

But if the credit is drawn on an electrical utility, rather than on the Chinese government, the fact that China plays neo-mercentalist games with their currency raises reasonable suspicions about the multiple-decade credit worthiness of an enterprise that sells in Yuan Renminbi, if its loan is denominated in € or ¥ or US$.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 04:00:31 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

The way that a nation avoids becoming exposed to an exchange rate meltdown a la many Southeast Asian nations in the Asian Financial Crisis is avoiding excessive debt denominated in foreign currency.

Quite. But the Chinese government has enough reserves to cover the gross Chinese hard currency debt, so there is no overriding need to continue to depress the exchange rate by adding to these reserves rather than by buying real stuff. If you buy the real stuff you want with dollars bought with your newly minted currency, it will also depress the exchange rate.

But if the credit is drawn on an electrical utility, rather than on the Chinese government, the fact that China plays neo-mercentalist games with their currency raises reasonable suspicions about the multiple-decade credit worthiness of an enterprise that sells in Yuan Renminbi, if its loan is denominated in € or ¥ or US$.

I'm not sure how you get to that conclusion, unless you believe that the Chinese government will further depress the exchange rate at some point? The sign of the exchange rate pressure looks wrong for a simple cessation of mercantilist gamesmanship to impair the solvency of such an entity.

It looks to me like political risk would be a lot more significant than vanilla currency risk over a 20-30 year period.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 23rd, 2012 at 04:16:39 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

It looks to me like political risk would be a lot more significant than vanilla currency risk over a 20-30 year period.

In what way, shape or form are they in any way distinct and separable for a country that is pegging its exchange rate? The exchange rate risk is a policy risk, combined with a risk of losing a capacity to enforce policy.

Substantial credit risks here are (1) the exchange rate risk and (2) the default risk of the actual borrower. From the perspective of US-based consortium raising funds in US$ capital markets, that default risk has to be seen as quite substantial. By contrast, for a Chinese-based consortium raising funds in China, converting what foreign exchange they require on a current rather than capital basis, the default risk seems likely to look much better compared to other investment opportunities in China.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jul 23rd, 2012 at 06:28:21 PM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

I was thinking of currency risk in terms of loss of ability to maintain a peg and subsequent movement of the floating rate.

Of course, loss of ability to maintain the peg is not always distinguishable from loss of willingness to maintain the peg. But it usually is, and I think it is useful to distinguish between the risk of a foreign government deciding to screw your investment over and the risk of a foreign government being unable to decide not to screw your investment over. The latter is a risk which can be forecast with some delicacy. The former is far closer to a Knightian uncertainty.

I find that it usually pays dividends to separate those two sorts of risk.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jul 24th, 2012 at 04:26:31 AM EST
[ Parent ]

Re: Or US$ (n/t) (none / 0)

In the abstract I guess, but the current pegging regime of China is to peg at a discount against a basket of foreign currencies, which eliminates the risk that they will be unable to maintain the peg. The risks that a creditor raising funds in US$ and having their electricity bought in Yuan Renminbi faces are (1) that China opts to increase the discount at which they are pegging, and (2) that China opts to reduce the weight of the US$ in the currency basket that they peg against, opening up the Yuan Renminbi / US$ exchange rate to greater volatility.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jul 24th, 2012 at 06:40:19 PM EST
[ Parent ]

Shanghai (4.00 / 2)

Sure, Shangai is a real load center, problem is that they have access to 2c/kWh coal-fired power, so there's not going to be a case for offshore wind until that changes. I would not trust a government that says "I'll pay you 12c/kWh for 15 years if you do offshore wind" in such circumstances, especially not China's.

Even Russia is not able to sell gas to China given how cheap coal has been.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Tue Jul 24th, 2012 at 05:10:46 AM EST
[ Parent ]

Re: Shanghai (none / 0)

Also - rather relevantly to this thread, China has astonishingly low construction costs for fission reactors. Largely because they have a very experienced heavy construction sector, which keeps the projects on time and on budget. At this point, odds are fairly good that the first EPR to sell power will be selling it to Chinese consumers - Now, whether this is a viable path to a low-carbon china depends on how much they could scale up their build programme before running into bottlenecks.

by Thomas on Tue Jul 24th, 2012 at 05:32:09 PM EST
[ Parent ]

Re: Shanghai (none / 1)

Yes, given that we can be reasonably confident that the current rate of domestic coal production cannot be maintained through to the end of the current decade.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jul 24th, 2012 at 06:42:30 PM EST
[ Parent ]

Is nuclear energy more expensive than offshore wind? | 121 comments (121 topical, 0 editorial, 0 hidden)

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